Report: The Impact of Mobile in Retail

steve rowen RSR Research

Steve Rowen, RSR Research

Consumers love their mobile devices and are adopting them and their tremendous functionality at an amazing rate. Still, retailers are hard-pressed to know which way to take new mobile initiatives. Yes, tablets and smartphones can empower the workforce, but which mobile-armed functionalities will be the most effective, and which will provide the greatest leverage in the field for the longest period of time? There is a lot of risk to enterprise-wide adoption of a bleeding-edge technology if its value and longevity cannot be guaranteed. Consumer-facing mobile initiatives bring even greater unforeseeable variables.

As a result, many retailers have chosen to wait-and-see, and their reticence applies not only to customer-facing mobility solutions, but those that are workforce-facing, as well. This is why we set out to conduct our latest research, The Impact of Mobile in Retail: to identify where retailers are in their mobile plans and to identify lessons for the way forward, drawn from the approaches of the best performers.

Paradox #1

Immediately, we are presented with a paradox. When asked to rate the level they agree with various statements about mobility’s role in the retail experience, retailers’ top-rated response is that mobile’s primary ability is to enhance the overall value of the brand.

Unto itself, this is hardly a problem. In fact, enhancing the overall brand is precisely how retailers should be viewing the tremendous value that new mobile technologies afford. What is problematic, however, is that much of what retailers share in the pages of this report, their actions, does not line up with this purpose. Instead, many of the findings of this research are in closer alignment to the second-most popular choice: that the current purpose of a mobile strategy is to serve merely as an extension of the existing eCommerce offering.

Paradox #2

The next paradox relates to retailers’ cognizance of just how much consumers have already integrated mobile devices into their current lifestyles. We were very specific in our line of questioning, asking one question about the percentage of sales that culminate in the mobile channel (more on that later), and another about percentage of sales influenced by the mobile channel. Some 52 percent of retailers believe that mobile devices are used at any point along the myriad paths-to-purchase modern consumers travel less than 25 percent of the time.

RSR strongly believes that the numbers are very low compared to the reality of mobile’s current role in the consumer’s paths-to-purchase. While it is difficult to quote precise numbers on just how frequently consumers enlist their personal mobile devices during the shopping process, including product research, reviews, availability, social network feedback and price comparisons, multiple quantitative consumer studies have gauged consumer mobile-device use. One such study is a 2012 IBM study of over 28,000 consumers in eight mature economies (Australia, Canada, France, Italy, Japan, Spain, the UK and the U.S.) and seven growth economies (Argentina, Brazil, Chile, China, Colombia, Mexico and South Africa). The study showed that 45 percent of consumers use two or more technologies to shop (usually a combination of PC-based Internet search and mobile), superseding the 40 percent that use only one technology (PC), and 10 percent that don’t use any technology. The IBM study showed that “seventy-one percent of consumers we surveyed said they were willing to shop digitally … (and) 85 percent of shoppers globally said that social networking can save shopping time by allowing them to connect and get recommendations from like-minded individ­uals whose opinions they value.”

The Power of Denial

Because the vast majority of our retail respondents operate stores (85 percent operate stores, 83 percent operate online channels and 64 percent operate social channels while only 41 percent operate a dedicated mobile commerce site), we wanted to know how retailers perceive their store-based staff’s ability to service the new mobile-empowered consumer in stores. The most common retailer response is that is not yet an issue. Again, we disagree.

However, for those retailers who do agree that their employees are struggling to meet the needs of newly empowered shoppers, it is worth noting the differences in how they plan to make their store associates more valuable to consumers: the best performers, Retail Winners, are more likely to provide mobile devices to store and department managers than competitors with average or lagging sales (26 to 16 percent).

The Impact of Mobile in Retail contains analysis of the business drivers, opportunities, and organizational constraints surrounding new mobile systems and practices being used in retail merchandising. The report is part of RSR Research’s ongoing efforts to provide market intelligence on retail technology trends and can be downloaded for free by following this link.